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Investigating the Relationship of Corporate Governance Mechanisms, Company Size, and Earning Management of Accepted Companies in Tehran Stock Exchange

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Author Affiliations

  • 1Department of Accounting, Semnan Branch, Islamic Azad University, Semnan, IRAN

Res. J. Recent Sci., Volume 3, Issue (7), Pages 90-97, July,2 (2014)

Abstract

Earning is the final result of economic activities and accounting processes, affected by different trends exerted by the managers of the companies. They try to change their financial earnings via different accounting methods. This study aims to investigate relationship of corporate governance mechanisms, company size, and earning management of accepted companies in Tehran stock exchangeDependent variable includes discretionary accruals for measuring earning management, private ownership, institutional ownership, company size, and ratio of independent CEO is independent variable. Variables of financial leverage and systematic risk are control variables. Statistical population of the study is accepted companies of Tehran Stock Exchange. Using systematic sampling, statistical sample of the study includes 91 companies in Stock Exchange of Tehran, active from 2003-2013. To gather information, in theoretical section, library method was used; and forhypothesis test, financial statements of accepted companies in Tehran Stock Exchange were studied. To analyze data, correlation method and multiple regression were usedThe results showed that private ownership, institutional ownership, and ratio of independent CEO have a negative and significant correlation with earning management. Also, company size has a positive and significant correlation with earning management.

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